MF Global Australia Limited (In Liquidation) (MFGA) ACN ... · prepared the digital statements for...

Members, Creditors and ClientsOn 1 November 2011 Christopher Campbell, David Lombe and Vaughan Strawbridge were appointed Joint and Several Administrators of the Company by the directors pursuant to section 436A of the Corporations Act 2001 (Cth).

At the second meeting of creditors on 2 March 2012 it was resolved that the Company be wound up via Liquidation.

The Liquidators of MFGA are pleased to have the opportunity to provide the Annual Report of the Liquidation of MFGA to the members, clients and creditors of MFGA. Whilst the report is only required to report upon one year of the Liquidation, to 2 March 2013, we have also included the Voluntary Administration period.

The Annual Report includes notice of a meeting of members and creditors (including clients) to be held on 31 May 2013 at 10.00am at our offices in Sydney to discuss the report and the liquidation.

Eighteen months ago when approximately one thousand Australian creditors and clients of collapsed broker MFGA met with the three Deloitte Administrators in Sydney on 11 November 2011 there were a number of concerns uppermost on their mind.

The time it would take to return the funds to clients

The primary source of apprehension could be traced back to the collapse of Lehman Brothers in September 2008, the largest bankruptcy in US history and foreshadowing the start of the Global Financial Crisis (GFC). Also top of mind were other corporate failures, such as Opes Prime Stockbroking which collapsed owing more than $1 billion to creditors but after a number of expensive court cases clients received around 37 cents in the dollar, and Sonray, where after nearly two years the matter was still unresolved and subject to Court hearings.

Clients were worried that it would take as long to get their money as it was taking in the Lehman Brothers matter. Unfortunately, after more than three years Lehman creditors had not received their money as the courts heard and dealt with the application of the law in determining the entitlements of various creditor groups across a number of jurisdictions.

Such a situation was a possibility for MFGA clients and creditors as disagreements arose over entitlements and the calculation of distributions. The situation with MFGA could have snowballed into years of litigation and the money being tied up.

It was a situation that the MFGA Liquidators were determined would not be repeated with the MFGA failure. MFGA collapsed on 31 October 2011 following a US$6 billion “bet” on European sovereign debt that went wrong, forcing the Australian operation into sudden and unexpected Voluntary Administration that froze $155 million of client funds in local accounts.

Complicating the picture was that existing laws did not provide a comprehensive answer to deal with those disputes. Because the law did not deal with the complexity of issues in MFGA, whilst acting as Administrators we commenced the Court process in December 2011.

On 2 March 2012 the second meeting of creditors voted to wind up MFGA. However even as Liquidators, we could not make any distributions to creditors due to the client disputes. The Liquidators outlined a list of issues to be resolved in the proceedings in the Supreme Court of NSW to the clients and creditors.

The various client and creditor groups were represented in the Court Proceedings. The goal was to assemble all the necessary evidence in a way that would enable the Court to make a speedy judgement and reduce the chance of an appeal. All parties were given the opportunity to appear on their own behalf in the Court Proceedings.

The Liquidators’ role in the Court Proceedings was to assist the Court and to provide evidence to all of the client representatives. The client representatives argued their case.

Legal teams had access to the Deloitte e-Discovery system that allowed them efficient access to the evidence, reducing costs and time. The ten legal firms could query the data, particularly the detail attached to the eight evidence reports prepared by the Liquidators.

Deloitte Forensic investigated the thousands of transactions in the 51 trust accounts, some going back 12 months, matched transactions with counterparties and clients, and documented their findings. As Deloitte Forensic had electronically traced and matched all transactions in the client segregated accounts, few queries were received for further tracing.

After four months of intense work, the Liquidators compiled the evidence for the Court to decide on 15 key points. The Liquidators required the Court to rule on these points before we were able to distribute funds to clients.

For four days, starting on 26 June 2012, the Court listened to the arguments of the barristers who represented the clients. Two months later, judgement was handed down. There have been no appeals by clients or creditors against the Court’s judgement.

MF Global Australia Limited (In Liquidation) (MFGA)ACN 001 662 007

As events unfolded creditors, who are owed about $319 million, received an initial $201.5 million of their money back within 12 months. This was followed in the next four months by three more distributions representing $76.5 million in total. To date an average of 87% of client claims have been distributed.

Costs

Clients and creditors were concerned, and some were quite vocal, that the costs of the liquidation and court action would significantly erode the funds available for distribution to clients.

The Liquidators were acutely aware of this issue and endeavoured to minimise costs even though a complex court process was required to resolve the competing claims. Appointing client representatives to represent all clients and creditors, utilising the services of a legal cost consultant and mitigation actions to reduce the chances of appeal has kept the court process costs to a minimum.

In January 2012, the Administrators sent out statements and an online client claim statement survey to most of the 11,049 clients in Australia and overseas who held 16,124 accounts, detailing their entitlements as calculated by the Administrators.

MFGA lost access to its overseas corporate systems to produce client statements. Therefore Deloitte Analytics prepared the digital statements for all clients while Deloitte Digital distributed those estimates to creditors using the Deloitte proprietorial Dtermine survey template. The process saved hundreds of thousands of dollars and identified competing client claims to be considered by the Court.

In a unique proposal, the Liquidators suggested to the Court using the same online survey distributed to clients in January and February 2012. The Court agreed to an online survey allowing clients to review the calculation of their entitlement and indicate if they agreed or disagreed with the calculation. This process saved at least three months in the distribution process and at least $1.5 million of costs the two occasions it was used.

To date the Liquidators have not been required to instigate expensive and time consuming litigation to recover the $138.6 million from counterparties. These recoveries have been achieved through negotiations, resulting in maximising returns for clients and avoiding expensive litigation costs.

At the first creditors’ meeting in November 2011 a committee of creditors was appointed to work with the Administrators. They represented the six major creditor groups: four client groups for Futures, contracts for difference (CFD), Margin FX, Online FX plus employees and unsecured creditors. At the second meeting the Committee was altered slightly but all stakeholders were represented.

This committee has not only provided a sounding board to assist the Liquidators, in particular for settlement of recoveries negotiations, but has reviewed and approved all of the Administrators’ and Liquidators’ remuneration.

Besides making the first major distribution within 12 months

after the MFGA collapse, and distributing an average of 87 cents in the dollar, the efficient use of technology and cost management of the court process has reduced the liquidation costs from the original estimate of 5 to 6 per cent of total claims to less than 4 per cent.

Recoveries from segregated bank accounts and counterparties

Clients were also worried that recoveries from counterparties would not be realised, or if realised would go for the benefit of MFGA.

The outcome is the protection offered to clients by MFGA holding funds pooled in client segregated accounts by product pool has been achieved. Recoveries from counterparties have also been directed for the benefit of each of the client pools.

The current situation is that the only funds not yet recovered relate to amounts owing where MFGA did not use a counterparty external to the MFGA global group, or a counterparty where there was no clear ability to prevent an offset to other debts owing by MFGA to the counterparty. Had these situations not been allowed to occur it is highly likely the returns to clients would be significantly more at this stage of the liquidation.

Estimated future outcome

Negotiations are continuing with the counterparties and the Liquidators are confident that additional recoveries will be realised. We are hopeful that the distribution range for each of the client pools will be in the vicinity of 90 to 95 per cent. Timing is not able to be predicted.

The position of the creditors of MFGA, including residual client claims, has a wide range of estimated outcomes. Benefits achieved for clients discussed above also benefit the creditors by reducing the claims against MFGA and meeting some of the costs of dealing with client issues. The analysis shows that the return to employees is likely to be 100%, whilst the returns to unsecured creditors could range from 3.24 cents to 41.42 cents in the dollar.

The Liquidators would like to thank you for your patience in this most complex of matters. Should you have any questions for the annual general meeting please forward them to [email protected].

Yours faithfully,

CR CampbellFor and on behalf ofCR Campbell, VN Strawbridge and DJF LombeJoint Liquidators

Deloitte Touche Tohmatsu Level 9 225 George Street SYDNEY NSW 2000

Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited © 2013 Deloitte Touche Tohmatsu. MCBD_Syd_05/13_048829

MF Global Australia Limited(In Liquidation)

Report to Members and Creditors

16 May 2013

1 Executive Summary 42 Voluntary Administration and Liquidation Timeline 63 Main Court Proceedings 74 Affiliates and Other Recoveries 125 Cost Allocation Proceedings 176 Position of Client Pools Summary 197 Sale/Transfer of Client Debt 238 Return from Winding Up 249 Communication 3110 Liquidators Receipts and Payments 3311 Committee of Creditors and Committee of Inspection 3412 Investigations 3413 Remuneration 3514 Inspection of Liquidators Account 4215 Annual General Meeting 42Appendix A Notice of AGM 44Appendix B Form of Proxy 46Appendix C Proof of Debt 48Appendix D Summary of Judgement 50Appendix E Remuneration 52

Administrators Christopher Robert Campbell, David John Frank Lombeand Vaughan Neil Strawbridge

ASIC The Australian Securities & Investments CommissionASO American Style OptionsASX Australian Securities ExchangeASX 24 ASX 24 Trading PlatformASX Clear ASX Clear Pty LtdASX Clear (Futures) ASX Clear (Futures) Pty LimitedATO Australian Taxation OfficeBNY Mellon Bank of New York MellonBrokerone Brokerone Pty Ltd ACN 070 037 482 (In Liquidation)CFD Contracts for Difference, a product offered by MFGAC/$ Cents in the DollarCSA Client Segregated AccountCOC Committee of CreditorsCOI Committee of InspectionCompany MF Global Australia Limited ACN 001 662 077 (In

Liquidation)Court Proceedings Proceedings commenced by the Liquidators in the

Supreme Court of New South Wales numbered411117/2011 and 102788/2012

Deloitte Deloitte Touche TohmatsuDEEWR Department of Education, Employment and Workplace

RelationsDeutsche Deutsch Bank AGERV Estimated Realisable ValueFutures Is a futures contract offered by MFGAFX Foreign ExchangeGEERS General Employee Entitlements and Redundancy

SchemeGLV Gross Liquidation Value

ThousandsLiquidators Christopher Robert Campbell, David John Frank Lombe

and Vaughan Neil StrawbridgeMain Proceedings Proceedings commenced by the Liquidators in the

Supreme Court of New South Wales numbered411117/2011 and 102788/2012

Margin FX / MFX Margin Foreign ExchangeMFGA MF Global Australia Limited ACN 001 662 077 (In

Liquidation)MFGSA MF Global Securities Australia Limited ACN 125 669

801 (In Liquidation)MFG Holdings MF Global Holdings Ltd and MF Global Finance USA

Inc.MFG HK MF Global Hong Kong LimitedMF Inc. MF Global Inc.MF Global UK / ASX This refers to funds in dispute between MFGA and MFG

UK in relation to monies held in ASX Clear (Futures)MFG Mauritius MF Global Mauritius Private LimitedMFG Singapore MF Global Singapore Pte LimitedMFG UK MF Global UK Limited

OCCP Online Client Claim ProcessOnline FX Online Foreign ExchangeOTC Over-the-counterProduct Pool Means each of the pools of cash and recoveries that

can be grouped by each MFGA lines of businessRATA Report as to AffairsRelation back day The date of appointment of LiquidatorsThe Act Corporations Act 2001The Court The Federal Court of Australia or any of the state

Supreme CourtsThe Regulations Corporations Regulations 2001

MF Global Australia Ltd ACN 001 662 007 (In Liquidation) Page 416 May 2013

1On 1st November 2011 we, Christopher Campbell, David Lombe and Vaughan Strawbridgewere appointed Joint and Several Administrators of the Company by the directors pursuantto section 436A of the Act.

At the second meeting of creditors on 2 March 2012 it was resolved that the Company bewound up via Liquidation.

The purpose of this report is to report to members and creditors of the Company pursuant toSections 508 of the Act. This report should be read in conjunction with my previous reportsand updates to creditors. Copies of these reports can be obtained from our websitewww.deloitte.com/au/mfglobal.

Appendix A. Thisnotice is pursuant to Sections 508 of the Act for an AGM of the members and creditors(including clients) of the Company to be convened and is to be held on Friday 31 May 2013at 10:00am, at the offices of Deloitte Touche Tohmatsu, Level 9, 225 George Street, SydneyNSW 2000 for the purpose of having an account laid before them showing the manner inwhich the winding up has been conducted and the property of the Company disposed of.

Also attached as Appendix B is a Form of Proxy to appoint a person or the Chairman tovote at the meeting on your behalf. Attached as Appendix C a Proof of Debt to becompleted by creditors of MFGA and returned to this office. It is not required for Clients tocomplete this form for their GLV claims against the Client pools.

This report sets out a summary of the key matters addressed during the Liquidation and theestimated financial position for clients and creditors.

Set out below is a summary of the current financial position of each of the client pools:

During the Liquidation the Liquidators needed to approach the Court to seek directions andrecommendations. A high level summary of the Liquidators results include:-

1. The protection offered to clients by MFGA holding their funds in client segregatedaccounts was upheld

2. Recoveries of monies from counterparties is for the benefit of clients

$'000 CFD Futures Online FX MFX TotalDistributionsTotal Claims 83,146 215,210 5,120 16,193 319,669Distributions Paid 72,377 189,306 4,864 11,659 278,206% Paid 87% 88% 95% 72% 87%Outstanding RecoveriesMFGA Affiliates 4,612 18,677 - 5,378 28,667Other 1,971 - - - 1,971Total Outstanding 6,583 18,677 - 5,378 30,638% Outstanding 7.9% 8.7% 0.0% 33.2% 9.6%


3. The only funds not yet recovered are:-

a. Monies from MFGA overseas affiliates where MFGA dealt with an affiliate rather than an external counterparty; and

b. One counterparty where there is a disputed ability to offset debts

4. The clients bear some of the costs of dealing with client matters and recovery of clientfunds. This is estimated to be less than 4% of client claims.

We anticipate that further monies will be recovered from affiliates and the one remainingcounterparty. However the time and amount of recovery is uncertain.

For creditors of MFGA the estimated financial position is summarised as follows: -

There are many factors that will impact the return to creditors of MFGA, key itemsinclude:-

Recovery of debts owed by MFGA affiliates Settlement of employee claims Settling disputed unsecured claims

Finalising the Liquidation of MFGA is dependent on the above key items. Timing andoutcome is not possible to predict.

We trust that creditors find this report informative and useful. In the event that you have anyqueries regarding the contents of this report, or the liquidation in general, please do not

[email protected].

$'000 Low HighEstimated Asset Realisations 34,604 37,268Less: Estimated Costs of the Liquidation (25,930) (24,430)Funds Available for Priority Creditors 8,674 12,838

Less: Estimated Payment to Priority Creditors (6,867) (4,266)Funds Available for Unsecured Creditors 1,807 8,572

Estimated Unsecured Creditor Claims 55,828 20,698

c / $ Estimated Return to Unsecured Creditors 3.24 41.42


2On 1 November 2011 Christopher Campbell, Vaughan Strawbridge and David Lombe wereappointed Administrators of the Company and subsequently appointed as Liquidators on 2March 2012.

A summary of the key actions during the Administration and Liquidation is set out below:

Key

Statutory

Recoveries

Court Proceedings

Distributions

November2011

December2011

January2012

February2012

March 2012

April2012

May2012

June2012

July2012

August2012

September2012

October2012

November2012

December2012

January2013

February2013

March2013

April2013

1 November 2011Directors of MFGA Appoint

Administrators

11 November 20111st Meeting of Creditors

2 March 20122nd Meeting of Creditorswhere it was resolvedthat the Company be

wound up via Liquidation

26 June 2012Main Court

Proceedings

29 August 2012Judgment

31 October 20121st Distribution

Approx. $201.5 million

ASX/MFG UKRecoveries

Approx. $36.2 million20 December 20122nd Distribution

Approx. $39.3 million MFG Inc. RecoveriesApprox. $10.6 million8 January 2013

3rd DistributionApprox. $10.7million

15 March 20134th Distribution


Deutsche BankRecoveries


Deutsche BankRecoveries


Deutsche Bank &BNY Recoveries

Approx. $723k

BNY & MFG MauritiusRecoveries


Deutsche Bank, BNY& ASX Recoveries


LiquidatorsPreparation of

Evidence

Appointment of ClientRepresentatives forCourt Proceedings

31 May 2013Annual General

Meeting

OCCP

OCCS Proving Process forClients

May2013


3

3.1 IntroductionMFGA offered a range of financial products including CFDs, Futures, Margin FX and OnlineFX to approximately 11,049 clients.

Client funds deposited with MFGA were held in 51 separate client segregated accounts. MFGA was a trading participant of the ASX and was required to comply with the

ASXassociated Corporation Regulations.

The Act and associated Corporation Regulations did not have the appropriate guidelines todeal with such a complex situation. In addition MFGA clients made competing claims on theirentitlements and how their entitlements were to be valued. These claims caused significantconflict, and prevented the early return of funds to clients.

The Liquidators main issues associated with recovering, preserving and distributing theCSAs and Recoveries are set out in the diagram below:

Pooling Entitlement

Is pooling or grouping permitted?

Should new CSAs (Recoveries)be pooled with existing CSAs?

If so, what pooling or groupingshould occur?

What date and method ofdetermining clients entitlements

to use?

E.g. at date of Administration ordate of close out of positions.

MAINISSUES

Recoveries Cost Allocation

To which account should fundsrecovered be paid into?

Future recoveries treated asfunds for clients?

OTC recoveries as funds forMFGA or clients?

Who should pay for the costs ofLiquidation, administering clientpools, making recoveries from

counter parties etc.?

In addition to the above, there were a number of other issues that were identified and wouldalso require direction from the Court:

Is foreign currency "money"? What currency conversion to use? Should interest earned on CSAs be paid to MFGA or clients? Is set-off between positive and negative account balances owed by the same MFGA

client allowed?


Should clients with entitlements of $1 or less be treated as having no entitlement? Should client deposits paid into CSAs on or after 1 November 2011 be paid back to

those clients?

For these issues to be resolved the Liquidators submitted an application to the Court seekingCourt directions, declarations and or relief as deemed appropriate in December 2011.

The Court Proceedings involved submission of evidence for each of the 15 issues identifiedby the Liquidators and the appointment of client representatives who would presentopposing arguments in relation to these issues.

Client representatives were identified to represent the various claims for all MFGA clients.The appointment of client representatives avoided duplication of legal costs and timeassociated with the Court Proceedings. The following parties were appointed by the Court torepresent each class of client:

Other parties that joined the proceedings were:

to protect its claim that it had the ability to offsetdebts owing to Deutsche against funds owing for CFD hedging.

MF Global Singapore: who claimed it could have an entitlement of approximately $13 million to

funds claimed to be held in trust for the CFD CSAs.

3.2 HearingsAs part of the Court process there were a number of direction hearings prior to the MainProceedings.

3.2.1 19 March 2012 Directions Hearing

The main outcome from this hearing was that four of the client representatives for the CFD,Futures, Margin FX and Online FX client classes were appointed and the Main Proceedingshad been provisionally set down for a final hearing of four days commencing on 26 June2012.

The Court ordered that the legal expenses reasonably incurred by the appointed clientrepresentatives would be paid from the CSAs and recoveries made to date on a pro-ratabasis. Also legal expenses of the Liquidators and non-client representatives would be paidfrom Company funds.

At the hearing MFG Singapore opposed the above orders for payment of costs from CSAsthat they were claiming an entitlement to. The result of this was that no funds would be

Class Representatives Date AppointedCFD Account Clients RMF Management Services Pty Ltd 19-March-2012Futures Account Clients GrainCorp Operations Limited 19-March-2012Margin FX Account Clients The GFL Group Pty Limited 19-March-2012Online FX Account Clients Underdog Clothing Pty Limited 19-March-2012Cash Only Clients Jiliby Pty Limited 05-June-2012Non-Client Creditors Practical Human Resource Solutions Pty Ltd 02-April-2012Futures Account Clients on Valuation Issue Transmarket Trading Pty Limited 20-June-2012Futures Account Clients on Recovery Issue Three Crown Investments Pty Limited 20-June-2012


drawn from the Singapore disputed accounts to meet legal expenses until the outcome ofthe Court Proceedings was determined.

3.2.2 2 April 2012 Directions Hearing

Practical Human Resources Solutions Pty Ltd was appointed as the non-client representative. In addition Kimbalex Investments Pty Ltd was appointed to representthe clients that held no open positions as at 1 November 2011.

As a result of a company affiliated with Kimbalex acting as a broker to a buyer of clientsclaims against MFGA, Kimblax offered to be replaced in its role as the cash onlyrepresentative. On 5 June 2012 Kimbalex was replaced by Jilliby Pty Ltd to represent thecash only clients.

3.2.3 23 April 2012 Directions Hearing

The Court heard a Notice of Motion filed by Deutsche. Deutsche sought an order that theproceedings would not bind it, or any other party in respect of any entitlement to set-offunder section 533C of the Act.

The Court did not make the order, but ordered Deutsche be a defendant to theProceedings.

3.3 Evidence and ReportsAs part of the Main Proceedings the Liquidators produced eight reports which were providedto the client representatives and formed the basis of evidence for the Main Proceedings.These reports were:

a) Distribution Report

This report provided the Court with a summary of recoveries and estimated outcome of tenscenarios on how funds could be distributed to MFGA clients.

b) Client Segregated Accounts Report

This was a detailed forensic report that detailed investigations of transactions for up to 12months in the CSAs.

c) Client Account Offset Report

This report identified client accounts of MFGA that had a negative Gross Liquidation Value and set out information to illustrate the impact of permitting the Liquidators to offset

positive and negative balances.

d) Close Out Adjustment Report

This report provided supporting information for the adjustments applied to client accounts inprocessing the close out transactions from 1 November 2011 to 27 March 2012.

e) Client Response to Close out GLV Report

This report summarised the client responses to the close out GLV calculations as set out inthe January 2012 statements.


f) Close Out Valuation Information Report

The purpose of this report was to provide information about the methods which MFGAvalued and processed close out transaction information received from counterparties from 1November 2011 to 27 March 2012.Below is a summary of the counterparty by product pool and method of close out foreach:

g) Affiliate Receipts and Payments Report

The affiliate receipts and payments report described the findings of investigations toascertain whether affiliate counterparty transactions were deposited into and paid out ofa CSAs associated with the relevant Product Pool for a period being three months

h) Cost Allocation Report

As part of the Court Proceedings the Liquidators requested directions as to theappropriate source of payments and/or recoupment of the LiquidatoL expenses in connection with administering the property held by MFGA astrustee, including the CSAs, and the procedure to adopt in connection with the paymentof such remuneration and expenses, including the costs and expenses of the applicationto Court.

The cost allocation report provided detailed information to the Court of the costs incurredduring the Voluntary Administration and Liquidation periods and various scenarios for theallocation of the costs.

3.4 Main ProceedingsThe Main Proceedings, commenced by the Liquidators in the Supreme Court of New SouthWales, were heard before Justice Ashley Black on 26 June 2012 for four days. TheLiquidators, eight client representatives, Deutsche and MFG Singapore made submissionsduring the proceedings.

Counterparty Product Pool Close Out MethodMFGUK/ASX Futures (Aust/NZ) Default Close OutASX Clear Futures (Aust) Default Close OutBNY Mellon Futures (US) Instruction Close OutMFG Singapore Futures (Asian) Default Close OutMFG HK Futures (Asian) Default Close OutMFG UK Futures (European) Default Close OutMFG Inc. Futures (US) Default Close OutDeutsche Bank CFDs (Australasian Equities) Default Close OutMFG Inc. CFDs (US Index and Commodities) Default Close OutMFG Singapore CFDs (FX) Default Close OutMFG UK CFDs (European and US Equities) Default Close OutMFG Singapore Margin FX Default Close OutMFG Mauritius Online FX Instruction Close Out


3.5 Judgment and Court OrdersJustice Black reserved his decision following the proceedings and handed down hisjudgment on 29 August 2012. Court Orders were handed down on 29 August 2012.

A summary of the judgment for each of the main issues, excluding cost allocation is below:

In addition the following were also determined on the smaller issues:

Foreign Currency is money and funds are to be converted into Australian dollars MFGA is entitled to exercise a right of set off of client accounts with positive and

negative balances Liquidators are entitled to return deposits that were received after appointment date

to the MFGA clients Online FX and Futures clients have no right to interest CFD and Margin FX clients have a right to interest MFGA is only entitled to interest on CSAs after making prior ranking payments

A detailed summary of Justice judgement is attached as Appendix D.

3.6 FX ConversionThe Liquidators converted all foreign currency held as at the date of the Court Orders intoAustralian Dollars. These funds were held in 39 bank accounts across nine currencies.

Four banks quoted indicative exchange rates to convert the funds. These quotes werefurther negotiated. After these negotiations, the final quotes were provided and the fundswere converted to AUD at the best available rate.

Pooling

lines

-basedaccounts and Australian-based CFD CSAs to bepooled

pooled with the existingCSAs across the fourproduct lines

Recoveries

claims to Futures Recoveries

counterparties are monies whichare required to be paid into therelevant CSAs

Entitlement

calculated as atappointment datei.e. 1 November 2011


4On 1 November 2011 $169 million was owed to MFGA from its affiliates and othercounterparties. Set out below is a summary of recoveries made to date:

4.1 ASXFor all but a small portion of Australian futures that were traded on the ASX TradingPlatform, MFGA was the market participant, however orpractical purposes prior to the appointment, MFGUK acted as clearing participant for MFGAalthough all activity was managed by MFGA employees.

On 1 November 2011 the ASX Clear Pty Ltd and ASX Clear (Futures) Pty Ltd suspendedboth MFGA and MFGUK as clearing participants and notices of default were issued.Subsequently the ASX took steps to close out all MFGA client open positions.

In respect to s client omnibus account, the ASX Clear Pty Ltd issued a statementshowing $735k was payable to MFGA. These monies were received on 23 November 2011

4.2 BNY MellonFor offshore futures, MFGA used agents to execute and clear transactions on the variousoffshore futures exchange and clearing houses. In the USA this was cleared through BNYMellon and MFG Inc.

On 3 November 2011 the Liquidators produced a notice to MFGA clients with positionscleared through BNY Mellon, requesting client instructions for those open positions to beclosed or transferred. A transfer would only be affected if another broker was willing toreceive the transfer without collateral (i.e. margin).

On 4 November 2011 BNY Mellon wrote to MFGA requesting instructions to transfer or

Initially the client instructions were actioned by MFGA through its affiliates as had beenconducted prior to the appointment of the Liquidators. However, this failed as a result of theincreased volume of worldwide transaction requests through the MF Global Group. Inaddition the online systems had been taken off line by counterparties which meant thattransactions had to be manually processed.

Counterparty Notes Owed Recovered Outstanding$'000s ($) ($) ($)ASX 4.1 735 735 -BNY Mellon 4.2 38,145 38,145 -Deutsche Bank 4.3 50,750 48,779 1,971MF Global Inc 4.4 17,545 14,109 3,436MF Global Mauritius 4.5 569 569 -MF Global UK / ASX 4.6 36,267 36,267 -MFG HK 4.7 1,828 - 1,828MFG Singapore 4.8 15,462 - 15,462MFG UK 4.9 7,941 - 7,941Total 169,242 138,604 30,638


On 7 November 2011 MFGA appointed a third party broker, Mizuho Securities Inc. toexecute the trades on various exchanges and give up the trades to BNY Mellon inaccordance with clients instructions. Whilst some illiquid positions were difficult to close out,the majority of positions were closed out or transferred by late November 2011.

By January 2012 all funds owing of $38.1 million had been received from BNY Mellon.

4.3 DeutscheClient CFD positions with MFGA in Asian and Australian CFD Equities were hedged withDeutsche.

On 1 November 2011This meant MFGA no longer had hedges to match its clients . MFGA issued anotice to close out all Australian and Asian equity CFDs on 1 November 2011.

To date $48.8m has been recovered and $1.97m is owing by Deutsche.

Deutsche have claimed a right of offset of the $1.97 million to meet legal costs, damagesand amounts owing for a futures account Deutsche held with MFGA.

The Liquidators are continuing the dispute with Deutsche regarding its set off claim.

4.4 MFG Inc.Clients of MFGA were able to trade on USA futures exchanges through the followingarrangements that MFGA had in place with third parties, pursuant to clearing accountagreements:

MFG Inc. executed and cleared positions on various US futures exchanges including theChicago Mercantile Exchange and the Chicago Board of Trade

In respect of trading on other USA exchanges, positions were executed by MFG Inc. andFutures US and the New York

Mercantile Exchange

On 31 October 2011, James Giddens of Hughes Hubbard (the was appointed asthe Bankruptcy Trustee of MFG Inc. The MFGA client funds held by MFG Inc. wereautomatically placed in the control of the Trustee.

Lawyers acting for the Trustee advised that the Trustee had withheld distributions to MFGInc. affiliates until the Trustee determined if the MFG Inc. affiliate client accounts are to betreated as client accounts, claims subrogated to client claims or intercompany accounts. Ifthe Trustee determined that the claims were not ranked equal to client claims then it wasunlikely that any funds would be recovered by MFGA for MFGA clients.

The Trustee set a bar date of 31 January 2012 for lodging claims against MFG Inc. client2012 which totalled US$18,018,383.05

(AUD 17,095,240).

The Liquidators had a number of discussions with the lawyers of the Trustee to negotiate the

in June 2012. The determination was subject to receiving additional information anddocumentation from the Liquidators. This was to be provided to the Trustee by 31 July 2012


however an extension was granted until the 30 September 2012. The main informationprovided was the outcome of the Court Proceedings where the court ordered recoveries,including from MFG Inc., would be paid to clients of MFGA and not to MFGA.

MFG Inc. had a small claim against MFGA and the Liquidators negotiated a reduction in thisclaim to be a nominal amount which was deducted from the MFG Inc. debt. The Committee

adjustment.

In November 2012 the Trusteerank as client claims in the MFG Inc. Bankruptcy.

To date $14.11 million has been recovered from MFG Inc.

4.5 MFG Mauritiuse FX was MFG Mauritius. MFG Mauritius was

not subject to insolvency proceedings.

MFGA continued communications with MFG Mauritius and several Online FX clients in orderto achieve an orderly close out of open Online FX positions. All Online FX positions wereclosed by 25 November 2011.

On 14 December 2011 $569k was received as well as interest and commission charges.

There are no outstanding monies due from counterparties in respect of Online FX.

4.6 MFG UK / ASXOn 31 October 2011, Richard Fleming, Richard Heis and Mike Pink (

of KPMG were appointed joint Special Administrators of MFG UK Limited (inspecial administration) following an application to the High Court by the directors of theCompany.

As detailed in section 4.1 above, MFGA were the market participant for Australian futures UK.

On 16 November 2011 the Liquidators wrote to the ASX requesting the ASX to return MFGAclient funds. The Special Administrator also wrote to the ASX on 18 November 2011requesting the same. Before returning the Client funds, the ASX required agreed paymentinstructions from both the Liquidators and the Special Administrators.

On 8 February 2012 the Federal Court made an order recognising the UK Special-Border Insolvency

Act 2008 (Cth). As an automatic consequence of the order, a stay applied to thecommencement or continuation of any legal proceedings in Australia against MFG UKunless the Court granted leave to proceed with any particular claim.

The Liquidators filed an application for leave to commence proceedings against MFG UK inrelation to its claim that MFG UK will hold the ASX Clear (Futures) funds, in its capacity as

By agreement with the UK Special Administrator the application had been adjourned anumber of times to allow settlement discussions.


The dispute was complex and the Liquidators continued to engage dialogue with the SpecialAdministrators, ASX and ASIC to recover the funds.

As no settlement had been achieved, the Liquidators proceeded with the Court action in theFederal Court of Australia on 3 August 2012. By consent between MFG UK and MFGA,MFGA was granted leave to commence and proceed with a cross-claim against MFG UK.

Whilst the Court proceedings were active, the Liquidators continued with their dialogue withthe Special Administrators to settle the matter.

On 31 August 2012 the Liquidators issued a notice of statement of cross-claim. MFG UKwas to file their defence by 28 September 2012. This was extended by agreement to 29October 2012 to allow negotiations to continue.

An agreement was reached with the Special Administrators of MFG UK in December 2012.The dispute was settled on the basis:

MFG UK to receive an amount of GB£400,000 for costs MFGA will receive the balance of the disputed funds, being approximately AU$35.2

million MFGA relinquishes all claims against the MFGUK Commitment Funds held by ASXCF

for approximately AU$3m.

The COI approved the Liquidators entering into the above agreement. In addition the NSWSupreme Court directed that the Liquidators would be justified in compromising the claim tothe disputed funds in accordance with the agreement reached with the SpecialAdministrators of MFGUK.

All funds owing of $36.3 million have been received by the Liquidators.

4.7 MFG HKOn 2 November 2011, Patrick Cowley, Fergal Power and Lui Yee Man of KPMG wereappointed as Joint and Several Provisional Liquidators over MF Global Holdings Hong Kong

Ltd and MFG HK by the High Court of Hong Kong.

Futures clients of MFGA were able to trade on the Hong Kong Mercantile Exchange throughclient accounts MFGA held with MFG HK.

All open positions had been closed out and in July 2012 MFG HK provided provisional closeout statements.

To date no funds have been recovered from MFG HK and $1.8 million is outstanding.However the Liquidators are hopeful that settlement negotiations will result in a recovery ofthese funds.

4.8 MFG SingaporeOn 1 November 2011, Bob Yap, Cheung Gee, Peter Chang, Fook Yuen and Roger TayPuay of KPMG were appointed Provisional Liquidators of MFG Singapore.


4.8.1 Futures

Futures clients of MFGA were able to trade on the Singapore Exchange, Tokyo StockExchange and Osaka Exchange through client accounts MFGA held with MFG Singapore.

MFGA lodged a claim with MFG Singapore on 31 January 2012.

To date no funds have been recovered from MFG Singapore in relation to Futures and $9.8million is still outstanding.

4.8.2 CFDs

Clients were able to trade FX CFDs which were hedged through foreign exchangetransactions with MFG Singapore under a Master Trading Agreement dated 19 January2002 between MFGA and MFG Singapore.

The Liquidators determined to close out all FX CFD positions and advised clients of theclose out on 4 November 2011.

To date no funds have been recovered from MFG Singapore$266.4k is still outstanding.

4.8.3 Margin FX

exchange transactions with MFG Singapore under a Master Trading Agreement dated 19January 2002 between MFGA and MFG Singapore.

under the Master Trading Agreement. Therefore MFGA closed out all Margin FX positionswith clients.

To date no funds have been recovered from MFG Singapore in relation to Margin FX and$5.4 million is still outstanding.

Following the Court Orders from the Main Proceedings, MFG Singapore is able to claim itslegal costs in respect of the Main Proceedings.

4.8.4 Recovery of Funds

MFG Singapore also has significant amounts owing to it as a client of MFGA. Distribution onthese accounts has been withheld by the Liquidators.

We expect to be able to finalise the quantum of claims between MFG Singapore and MFGAin the near future. Once this is established we are then able to enter negotiations to attemptto settle the claims and realise debts owing to MFGA clients.

4.9 MFG UK4.9.1 CFDs

MFGA clients trading European and American Equity CFDs were hedged through MFG UKunder an ISDA Master Agreement.


On 7 November 2011 MFG UK

On 31 January 2012 MFGA submitted its claim with the MFG UK Special Administrators inrespect of the CFD hedges.

To date no funds have been recovered from MFG UK in relation to the CFDs and $4.2million is still outstanding.

4.9.2 Futures

Clients of MFGA were able to trade on European futures exchanges (including Eurex, theLondon Metals Exchange and ICE Futures Europe) through an arrangement where MFGAheld client accounts with MFG UK.

was lodged with MFG UK on 31 January 2012. Receipt of the claim wasreceived by the Special Administrator on 31 January 2012.

To date no funds have been recovered from MFG UK in relation to Futures and $3.7 millionis still outstanding.

4.9.3 Counter Claim of Funds

MFG UK is also a CFD and Futures client of MFGA. Distribution on these accounts has beenwithheld by the Liquidators.

The quantum of claims between MFGA and MFG UK has been agreed. However thecategorisation of the claims MFGA has against MFG UK have not been agreed. We haveentered negotiations to attempt to reach a commercial settlement to resolve the matter andrecover funds for MFGA clients.

4.10 SummaryAs at 16 May 2013 significant funds have been recovered as follows:

5

5.1 IntroductionAs part of the Main Proceedings the Liquidators applied for directions as the appropriate

th administering the property held by MFGA astrustee, including the CSAs. Also the Liquidators sought directions for the processassociated with the payment of such remuneration and expenses, including the costsand expenses of the application.

Product Pool Total$'000 ($) % ($) % $CFD 49,435 88% 6,583 12% 56,019Futures 88,600 83% 18,677 17% 107,278Margin FX - 0% 5,378 12% 5,378Online FX 569 100% - 0% 570Total 138,604 30,638 169,242

Recovered Oustanding


5.2 Proceedings and JudgmentThe hearing to determine the payment of costs in the proceedings and the Liquidationwas heard on 10 October 2012.

On 10 December 2012 orders were issued by the Court as below:

The Liquidators remuneration relating to obtaining, or attempting to obtain, recoverieswill be paid (or recouped) from the Client Pools in the proportion stipulated by theCourt Orders

The Liquidators legal expenses relating to the Court Proceedings as well as expensesrelating to obtaining, or attempting to obtain, recoveries will be paid (or recouped)from the Client Pools in the proportion stipulated by the Court Orders

The client and non-Proceedings will be paid (or recouped) from the Client Pools in the proportionstipulated by the Court Orders.

An internal report was prepared to set out the process undertaken by the Liquidators inallocating the costs pursuant to the Court Orders dated 10 December 2012. The Liquidatorsprovided the COI with a copy of the draft report at the COI meeting on 8 March 2013. TheLiquidators discussed their approach and methodology with the COI.

Costs and expenses payable from client pools estimated as at 3 May 2013 is approximately3.28% of total client claims as shown by product pool below:

$'000 CFDs Futures Online FX Margin FX TotalTotal Recoverable Remuneration, Costs and Expenses 2,813 7,127 133 409 10,482Client Claims 83,146 215,210 5,120 16,193 319,669Percentage 3.38% 3.31% 2.59% 2.52% 3.28%


6The table below shows a comparison of the client positions as reported in our secondcreditors report dated 22 February 2012 and what has been realised to date:

A further breakdown by product pool is set out below:

Summary of Client Position($'000s)

Client Claims 309,078 319,669 10,590

Cash Available for DistributionCash on Appointment 150,360 150,936 576Cash recovered from Counterparties 82,233 138,604 56,371Cash recovered from Clients - 3,927 3,927Interest and Bank Fees - 6,487 6,487

Total 232,593 299,954 67,360

Less Costs Recovered Paid as per Court Orders (6,750) (8,613) (1,863)Less Contingency & Accruals for Costs - (9,852) (9,852)Funds Available for Distributions 225,896 281,489 55,592

% of Total GLV Available for Distribution 73.1% 88.1% 15.0%

Recoveries Outstanding as at 16/05/13Deutsche Bank 7,030 1,971 (5,059)MFG UK/ASX 34,072 - (34,072)MFG Inc. 17,550 3,436 (14,114)MFG UK 7,940 7,941 1MFG HK 1,830 1,828 (2)MFG Singapore 15,468 15,462 (6)

83,890 30,638 (53,252)

% of Total GLV Outstanding to Recover 27.1% 9.6% (17.6)%Distribution %

Available for Distribution 73.1% 88.1% 15.0%To be Recovered 27.1% 9.6% (17.6)%

Total 100.2% 97.6% (2.6)%

439A Report AGM Report Difference


6.1 Position of Client Pools Product Pools6.1.1 Futures Product Pool

The table below shows a comparison of the financial position in respect of the Futures clientpool:

6.1.2 Summary

As per the court orders dated 19 September 2012, client claims been adjusted to theGLV entitlement as at 31 October 2011.

Cash available for distribution have increased as it includes interest for the period todate, recoveries made by the Liquidators and minor gains on foreign currencytranslations subsequent to the physical conversions in accordance with the Corders.

To date, 88% of client claims have been distributed in four separate distributions.

A further 10.2% would be returned if all outstanding recoveries are received. Allfunds outstanding are with MF Global Affiliates.

The Liquidators are also holding a sufficient contingency to meet the potential coststo recover the $22m of funds outstanding. This contingency will only be utilisedshould it be required to cover costs subject to the costs orders to recover funds onbehalf of clients. Any unutilised contingency will be returned to clients.

Summary of Client Position($'000s)Client Claims 209,746 215,210 5,463

Cash Available for Distribution 146,282 204,564 58,282Less Distribution to Clients - (189,312) (189,312)Cash Available to Client Pools 146,282 15,253 (131,030)

% of Total GLV Distributed to Date 0.00% 88.00% 88.00%Less Costs Recovered Paid as per Court Orders (4,540) (5,941) (1,401)Less Contingency & Accruals for Costs - (5,993) (5,993)Funds Available for Further Distributions 141,742 3,319 (138,423)

% of Total GLV Available for Distributed 67.6% 1.5% (66.1)%Recoveries Outstanding as at 16/5/13

Deutsche Bank - - -MFG UK/ASX 33,722 - (33,722)MFG Inc. 17,100 3,291 (13,809)MFG UK 3,740 3,740 0MFG HK 1,830 1,828 (2)MFG Singapore 9,820 9,818 (2)

Total 66,212 18,677 (47,535)% of Total GLV Outstanding to Recover 31.60% 8.68% -22.92%

Distribution %Distributed 0.0% 88.0% 88.0%Available for distribution 67.6% 1.5% (66.0)%To be recovered 31.6% 8.7% (22.9)%

Total 99.1% 98.2% (1.0)%



6.1.3 CFD Product Pool

The table below shows a comparison of the financial position in respect of the CFD clientpool:

6.1.4 Summary

As per the court orders dated 19 September 2012, client claims have been adjustedto the GLV entitlement as at 31 October 2011. This has meant that clients whoseclaims had changed due to close out movements were referred back to their 31October 2011 statements plus any pre 31 October 2011 adjustments.

Cash available for distribution has increased as this includes interest for the periodto date, recoveries made by the Liquidators and minor gains on foreign currency

orders.

To date 87% of client claims have been distributed in two distributions.

A further 7.9% would be returned if all outstanding recoveries are received.

The Liquidators are also holding a sufficient contingency to cover the potential coststo recover the $6.6m of funds outstanding. This contingency will only be utilisedshould it be required to cover costs subject to the costs orders to recover funds onbehalf of clients. Any unutilised contingency will be returned to clients.

Summary of Client Position($'000s)Client Claims 78,929 83,146 4,217

Cash Available for Distribution 68,464 77,026 8,562Less Distribution to Clients - (72,342) (72,342)Cash Available to Client Pools 68,464 4,684 (63,780)% of Total GLV Distributed to Date 0.0% 87.0% 87.0%Less Costs Recovered Paid as per Court Orders (1,710) (2,280) (570)Less Contingency & Accruals for Costs - (2,405) (2,405)Funds Available for Further Distributions 66,754 (0) (66,755)% of Total GLV Available for Distribution 84.6% (0.0)% (84.6)%Recoveries Outstanding as at 16/5/13

Deutsche Bank 7,028 1,971 (5,057)MFG UK/ASX 350 - (350)MFG Inc. 450 145 (305)MFG UK 4,200 4,201 1MFG HK - - -MFG Singapore 266 266 (0)

Total 12,294 6,584 (5,711)% of Total GLV Outstanding to Recover 15.6% 7.9% 0.0%Distribution %

Distributed 0.0% 87.0% 87.0%Available for distribution 84.6% (0.0)% (84.6)%To be recovered 15.6% 7.9% (7.7)%

Total 100.2% 94.9% (5.2)%



6.1.5 Margin FX Product Pool

The table below shows a comparison of the financial position in respect of the Margin FXclient pool:

6.1.6 Summary

As per the court orders dated 19 September 2012, client claims have been adjustedto the GLV entitlement as at 31 October 2011. Only pre 31 October 2011 adjustmentshave been added to client GLV entitlements as the close out statements did notinclude any close out movements due to the required close out data not beingprovided by MF Global Singapore.

To date 72% of client claims have been distributed in two distributions.

A further 33.2% would be returned if all outstanding recoveries are received.

The Liquidators are also holding a sufficient contingency to cover the potential coststo recover the $5.4m of funds outstanding. This contingency will only be utilisedshould it be required to cover costs subject to the costs orders to recover funds onbehalf of clients. Any unutilised contingency will be returned to clients.

Summary of Client Position($'000s)Client Claims 16,190 16,193 2

Cash Available for Distribution 12,871 13,283 412Less Distribution to Clients - (11,656) (11,656)Cash Available to Client Pools 12,871 1,627 (11,244)

% of Total GLV Distributed to Date 0.0% 72.0% 72.0%Less Costs Recovered Paid as per Court Orders (400) (236) 164Less Contingency & Accruals for Costs - (1,391) (1,391)Funds Available for Further Distributions 12,471 0 (12,471)

% of Total GLV Available for Distribution 77.0% 0.0% (77.0)%Recoveries Outstanding as at 16/5/13

Deutsche Bank - - -MFG UK/ASX - - -MFG Inc. - - -MFG UK - - -MFG HK - - -MFG Singapore 5,378 5,378 (0)

Total 5,378 5,378 (0)% of Total GLV Outstanding to Recover 33.2% 33.2% 0.0%Distribution %

Distributed 0.0% 72.0% 72.0%Available for distribution 77.0% 0.0% (77.0)%To be recovered 33.2% 33.2% (0.0)%

Total 110.2% 105.2% (5.0)%



6.1.7 Online FX Product Pool

The table below shows a comparison of the financial position in respect of the Online FXclient pool:

6.1.8 Summary

As per the court orders dated 19 September 2012, client claims have been adjustedto the GLV entitlement as at 31 October 2011.

Cash available for distribution has increased as this includes interest for the periodto date, recoveries made by the Liquidators and minor gains on foreign currency

orders.

To date 94.9% of client claims have been distributed in three distributions. There areno funds outstanding to collect.

The Liquidators are also holding a sufficient contingency to cover the future unbilledcosts. Any unutilised contingency will be returned to clients.

7Prior to the Court s determination the Liquidators received a number of questions fromclients and creditors regarding the sale of their client claims against MFGA. Even though thefacilitation of client debt sales was not specifically a role of the Liquidators, the Liquidatorsdecided to establish a streamlined process to facilitate the transfers.

Summary of Client Position($'000s)Client Claims 4,213 5,120 907

Cash Available for Distribution 4,976 5,080 105Less Distribution to Clients - (4,860) (4,860)Cash Available to Client Pools 4,976 220 (4,755)

% of Total GLV Distributed 0.0% 94.9% 94.9%Less Costs Recovered Paid as per Court Orders (100) (157) (57)Less Contingency & Accruals for Costs - (63) (63)Funds Available for Further Distributions 4,876 (0) (4,876)

% of Total GLV Available for Distribution 115.7% (0.0)% (115.7)%Recoveries Outstanding as at 16/5/13

Deutsche Bank - - -MFG UK/ASX - - -MFG Inc. - - -MFG UK - - -MFG HK - - -MFG Singapore - - -

Total - - -% of Total GLV Outstanding to Recover 0.0% 0.0% 0.0%Distribution %

Distributed 0.0% 94.9% 94.9%Available for distribution 115.7% (0.0)% (115.7)%To be recovered 0.0% 0.0% 0.0%

Total 115.7% 94.9% (20.8)%



The Liquidators determined that the process should be self-funding. The debt transferprocess should not be a cost of the Liquidation as it only benefited the clients that chose tosell their claim against MFGA.

The Liquidators were independent to the sale process and advised clients they would notprovide any recommendation to clients to sell or not to sell their claims, provide any view onthe value of their claim, provide any recommendations or names of the parties that may ormay not be in the market to acquire claims for MFGA clients.

At the time of implementing the debt transfer process the Liquidators understood that therewas a significant demand for the sale of the debt.

However, to date only 111 accounts were transferred as set out below and 46 of theseaccounts where on sold:

Pursuant to Section 477 of the Act, the Liquidators were required to obtain COI approval toenter the agreements as they were for longer than three months.

This approval was granted by the COI on 14 May 2012 for the period of six months until 14November 2012. Due to the low number of transfers the Liquidators did not extend thisperiod. The Liquidators issued a notice to clients on 8 November 2012 advising that thetransfer of client debt would close on 14 November 2012.

8

8.1 Online Client Claim ProcessSubsequent to the judgment being handed down in relation to the Main Proceedings,Notices of Entitlement were issued to clients in September 2012 either electronically oras a hard copy mailed in the post. For those clients where valid email addresses wereheld an email was sent with a secure link to the OCCP Survey for the account holder orauthorised person to either confirm, or not confirm, the GLV for the account.

Where there was no email address, or the email address on file resulted in a non-deliver/bounce-back, the Notice of Entitlement was mailed together with a hard copyversion of the OCCP Survey for return by prepaid mail.

Some MFGA clients are classified as White Label Clients. These are clients of MFGAthat had multiple client omnibus accounts that issue trade instructions direct to MFGA onbehalf of the White Label Client. Notices of Entitlement for each of the White Label

Label Clients with a hard copy version of the OCCP Survey. White Label Clients andaffiliates of MFGA were not part of the online survey tool.

Product Pool (AUD) CFDs Futures Margin FX Online FX Total ($)GLV of Accounts 9,251,097 20,595,819 131,015 - 29,977,932% of Total 30.86% 68.70% 0.44% 0.00%

No of Accounts Transferred 44 65 2 - 111


A summary of the Notices of Entitlement and surveys generated and distributed by theLiquidators is set out below:

Not all surveys issued by the Liquidator were completed and returned.

Responses to the survey were received for approximately 59% of accounts thatrepresented approximately 93% of the GLV value. This is set out below:

Of the 5,183 client accounts that completed the OCCP and hard copy surveys (i.e. notincluding affiliates and white labels accounts), 99% of accounts confirmed their GLV,representing 84.3% of the total GLV value of clients that responded to the survey. This is setout in the table below together with the survey responses from the affiliates of MFGA.

The Liquidators remain in negotiations with the affiliates regarding their accounts that weredisputed. The 54 client disputes that were received represented a combined GLV ofapproximately $40.8m or 15.7% of the total client GLV.

Notices of Entitlement Issued Summary# GLV ($'000) # GLV ($'000) # GLV ($'000) # GLV ($'000) # GLV ($'000)

External ClientsOCCP 4,375 54,768 3,657 194,352 601 5,020 420 15,951 9,053 270,091Hard copy claim forms 410 386 837 3,328 - - - - 1,247 3,714White labels 1,062 8,365 - - - - - - 1,062 8,365

AffiliatesWhite labels 3,610 15,326 - - - - - - 3,610 15,326Affiliate (Omnibus) accounts 4 4,301 7 16,964 - - - - 11 21,265

Total - Notices of Entitlement issued 9,461 83,146 4,501 214,644 601 5,020 420 15,951 14,983 318,761

Notices of Entitlement not issued (unable to contact Client) 1 - 71 566 24 100 93 242 189 908

Total 9,462 83,146 4,572 215,210 625 5,120 513 16,193 15,172 319,669Source: Deloitte analysis

CFDs Futures Online FX Margin FX Total

Survey results# GLV ($'000) # % GLV ($'000) % # % GLV ($'000) %

OCCP and hard copyCFD 2,278 52,520 2,266 99.5% 51,845 98.7% 12 0.5% 675 1.3%Futures 2,307 189,100 2,274 98.6% 149,235 78.9% 33 1.4% 39,865 21.1%Online FX 379 4,509 373 98.4% 4,489 99.6% 6 1.6% 20 0.4%Margin FX 219 13,330 216 98.6% 13,103 98.3% 3 1.4% 227 1.7%

Total client accounts 5,183 259,459 5,129 99.0% 218,672 84.3% 54 1.0% 40,787 15.7%

AffiliatesWhite Label 3,610 15,326 1 0.03% 693 4.5% 3,609 99.97% 14,632 95.5%Affiliate (Omnibus) 11 21,265 9 81.8% 20,259 95.3% 2 18.2% 1,007 4.7%

Total 8,804 296,050 5,139 58.4% 239,624 84.2% 3,665 41.6% 56,426 19.1%

GLV confirmed GLV disputedSurveys completed

Surveys completed# GLV ($'000) # % GLV ($'000) % # % GLV ($'000) %

OCCP and hard copyCFD 4,785 55,154 2,278 48% 52,520 95% 2,507 52% 2,634 5%Futures 4,494 197,680 2,307 51% 189,100 96% 2,187 49% 8,580 4%Online FX 601 5,020 379 63% 4,509 90% 222 37% 511 10%Margin FX 420 15,951 219 52% 13,330 84% 201 48% 2,621 16%

AffiliatesWhite Label 3,610 15,326 3,610 100% 15,326 100% - 0% - 0%Affiliate (Omnibus) 11 21,265 11 100% 21,265 100% - 0% - 0%

ExternalWhite Label 1,062 8,365 - 0% - 0% 1,062 100% 8,365 100%

Total 14,983 318,761 8,804 59% 296,050 93% 6,179 41% 22,711 7%

Notices of Entitlement issued Surveys completed Surveys not completed


The table below sets out a description of the types of disputes outlined above as well as the

Pursuant to Court Orders the Liquidator had 28 days from the date of being providedinformation regarding a client dispute to notify the client of its adjudication of that disputefrom which time the client had 21 days to appeal the decision.

Each dispute was responded to within the permissible 28 day period and none of thewithin the permissible 21 day period.

Further to the disputes outlined above which were made as part of the proving process, theLiquidator also received disputes relating to the adjustments made by the Liquidator ondistribution for ASOs transferred to clients after 1 November 2011. Disputes were receivedfrom 4 clients holding 21 accounts with a combined GLV of approximately $37.3m. Alldisputes regarding distribution adjustments for American Style Options wererejected by the Liquidator. No further action was taken by the disputing clients.

Type of Dispute Description of Dispute Liquidators' Response

Close-out

The client has disputed the Court orderedmethodology for valuing open positions atmarked to market as at 31 October 2011.The majority of these disputes were clientswho had preference for actual close-outprices being applied for valuing their positions

Rejected all disputes and directed clients tothe relevant paragraphs of the Court Ordersstating the methodology to be applied incalculating client entitlements

No reasons provided

The client has not responded with anyreason for disputing their GLV

Rejected all disputes and directed clients tothe relevant paragraphs of the Court Ordersstating the time period allowed for clients toprovide the Liquidator with particulars of theirdispute

Disputes include: Responses as follows:

Withdrawn

The client notified the Liquidator of their wishto withdraw their dispute prior to theLiquidator formally adjudicating their dispute

No response required

Other

1. Client owed rebates from MFGA2. Separate account of less than $1 notincluded in client GLV3. Treatment of out-of-the-money options4. Prices/rates applied in calculation of clientGLV5. Client wanted dividend amount receivedpost appointment on his position6. 3rd party payment prior to appointmentnot credited appropriately to client account

1. Rejected disputes and informed client thatdisputed amount is an unsecured claim ofMFGA2. Rejected dispute and directed clients tothe relevant paragraph of the Court Ordersrelating to accounts <$13. Informed client that balance would beadjusted on distribution4. Investigated and rejected dispute havingconfirmed pricing5. Rejected dispute and directed client to therelevant paragraphs of the Court Ordersstating the methodology to be applied incalculating client entitlements6. Further information requested of client. Noresponse received as at the date of thisreport


8.2 Distribution to Clients8.2.1 Distribution

To date four distributions have been made to clients.

8.2.2 First Distribution

The first distribution commenced on 31 October 2012 for all client pools. Creceived 78c/$, Futures clients 57c/$, Margin and Online FX clients received 65c/$. The

Approximately 700 payments from the first distribution were returned for various reasons,including invalid BSB numbers, invalid account numbers or closed accounts. Of these,approximately 650 remain outstanding and have not provided updated banking details.

Over 2,900 accounts did not receive a distribution due to insufficient or incomplete bankingdetails available at the time of the distribution. 1,200 of these accounts have subsequentlybeen updated and received distributions.

A small number of client accounts were withheld due to disputes that have subsequentlybeen resolved, or were withheld due to being affiliate accounts.

8.2.3 Second Distribution

The second distribution commenced on 20 December 2012 for Futures and Online FXclients only after the receipt of funds from the ASX from the settlement with MFG UK andreceipt of funds from MFG Mauritius. Futures clients received 17c/$ and Online FX clientsreceived 15c/$.

8.2.4 Third Distribution

The third distribution commenced on 9 January 2013 for Futures clients only after the receiptof funds from MF Global Inc. Futures clients received 5c/$.

8.2.5 Fourth Distribution

Prior to distributions two, three and four, the Liquidator received the Court Orders in relationto the costs of the court proceedings and recovery of funds on behalf of clients. TheLiquidator finalised the calculations in accordance with the orders to recover funds from theclient pools in relation to the court proceedings and recoveries. Subsequently, theLiquidators were able to distribute further funds to clients.

The fourth distribution commenced on 14 March 2013 for all client pools. CFD clientsreceived 9c/$, Futures clients received 8c/$, Online FX clients received 15c/$ and Margin FXclients received 7c/$. This took the total funds distributed to date to between 72 and 95c/$for all clients with verified and confirmed banking details.A number of clients requested cheques to be paid where bank account details were unableto be provided, and a small number of clients were entities that had been deregistered andthe funds were paid to ASIC.

First Distribution31 October 2012

Third Distribution9 January 2013

Approx $201.5 million Approx $10.7 million

Fourth Distribution14 March 2013

Approx $26.5 million

Second Distribution20 December 2012

Approx $39.3 million


8.2.6 Summary

Set out below is a summary of the above distributions by product pool as at 16 May 2013:

Distributions($000's)

First Distribution 64,893 122,801 3,328 10,525 201,547% 78.0% 57.1% 65.0% 65.0%

Second Distribution - 38,597 768 - 39,365% 0.0% 17.9% 15.0% 0.0%

Third Distribution - 10,713 - - 10,713% 0.0% 5.0% 0.0% 0.0%

Fourth Distribution 7,484 17,194 768 1,133 26,579% 9.0% 8.0% 15.0% 7.0%Total 72,377 189,306 4,864 11,659 278,206% 87.0% 88.0% 95.0% 72.0%

CFD Futures Online FX MFX Total


8.3 Estimated Statement of PositionSet out below is a comparison showing the analysis of the estimated financial position(excluding GST) from our report to creditors dated 22 February 2012 and updated estimatesas at 16 May 2013:

Estimated Statement of Position Notes

($'000s)

Cash Available for DistributionTotal Assets Recovered 6.3.1 23,300 26,285 26,285

23,300 26,285 26,285Add Futher Recoveries

Recoveries Commitment Funds - 2,000 2,000Surplus from Pools 700 - 844Unsecured Affiliate Claims - - 1,820Cost Recovery from Client Pools 6,697 6,319 6,319

7,397 8,319 10,983

Total Asset Realisations 30,697 34,604 37,268

Less Liquidators Costs:Administrators/Liquidators Fees - Paid (6,008) (7,836) (7,836)Administrators/Liquidators Fees - Estimated - (2,000) (1,000)Administrators/Liquidators Legal Fees - Paid (4,500) (5,348) (5,348)Administrators/Liquidators Legal Fees - Estimated - (1,000) (500)Employee Termination Payments Paid - (4,896) (4,896)Trading Costs 6.3.2 (2,886) (4,850) (4,850)

(13,394) (25,930) (24,430)

Total Funds Available for Priority Creditors 17,303 8,674 12,839

Priority Creditors 6.3.3Employee Entitlements 10,900 3,648 3,648Conitengency - 3,219 618

10,900 6,867 4,266

% Distributed to Priority creditors 100% 100% 100%

Surplus/(Shortfall) 6,403 1,807 8,573

Unsecured Creditors 6.3.4Employee Claims 1,500 1,510 1,510Trade Creditors 10,838 16,138 10,838Shortfall to MFGA Clients 83,845 38,180 8,350

Total Unsecured Creditors 96,183 55,828 20,698

c / $ return to Unsecured Creditors 6.66 3.24 41.42

Estimated439A Report

UpdateEstimate

Low

UpdateEstimate

High


8.3.1 Assets Recovered

Asset recoveries are higher than originally estimated due to:

Treatment of Bank Guarantee used to pay for ongoing rent Interest earned on House Funds Debt trading receipts and property plant and equipment sales above estimate Receipt of dividend from unlisted investment

8.3.2 Trading Costs

Trading costs are higher than estimated due to rent and outgoings on office space. Eventhough the Liquidators relocated the business operations in March 2012 to a smaller spacein Grosvenor Place, Sydney NSW, they continued to occupy the premises until November2012 which was longer than forecast.

Employee wages were also higher than forecast due to the longer than originally anticipatedtime required. However retaining the employees was more cost effective than assigningcontractors or Liquidators staff.

8.3.3 Priority Creditors

On 1 November 2011 all employees of MFGA were retained whilst the Liquidators attemptedto sell the business as a going concern. As a sale did not occur and only the key employeesin the finance and back office departments were retained.

The number of employees decreased over the Liquidation from 13 employees in January2012, to 2 by October 2012 whose employment ceased in November 2012 after the firstdistributions were processedpositions and updating Company records.

All outstanding annual leave and payment in lieu of notice, entitlements have been paid toemployees out of the funds of MFGA.

However, in relation to the outstanding long service leave and redundancy, eligibleemployees could submit a GEERS claim to the Department of Education, Employment andWorkplace Relations ( DEEWR ).

The Liquidators wrote to DEEWR and provided them with a schedule of entitlements owingto all employees. All claims had to have been submitted by 2 March 2013, being 12 monthsfrom the date of the appointment as Liquidators.

On 28 February 2013 the first payment of $647,018 from DEEWR was received for 18 A further tranche of $1.27

million was received on 10 May 2013 and will be distributed to 37 employees shortly afterthis report is published.

We are finalising our adjudication of one large employee claim and due to the size of theclaim it is imperative that this is adjudicated on prior to being able to making a furtherdistribution to employees, as it may significantly impact on the level of distribution that weare able to pay to all employees.


8.3.4 Unsecured Creditors

unsecured creditors were previously estimated to be $10.8 million. Thisincluded trade creditors of $2.4 million, affiliate non-client creditors of $6.4 million andestimated contingent liabilities of $2.0 million. The contingent liability relates to the potential

A landlord has now submitted a formal proof of debt for $5.3 million. The Liquidators will onlyadjudicate on this claim when it becomes clear that a dividend will be paid to unsecuredcreditors.

The large employee and landlord claim will impact on the overall return to unsecuredcreditors.

9A Court Order was obtained to be able to communicate with the clients of MFGA via email.This was the most cost effective, timely and practical means of communication with the largenumber of MFGA clients both domestically and internationally. All notices were madeavailable via the website at https://www.deloitte.com/au/mfglobal.

In an effort to reduce the costs of the Liquidation, the Liquidators decided that while generalclient update notices would still be prepared and uploaded to the website, they would not beemailed out unless necessary.

The table below outlines the approximate quantum of correspondence received from 1November 2011:

The table below outlines the approximate number and type of emails received to date to theMFGA email:

Nature of Correspondence Number receivedEmails 21,030Letters & Faxes 3,000Phone Calls 9,000Total 33,030

Nature of Email Number ReceivedAssessed as no response required 3,000Client bank detail update request 4,500Client contact detail update request 350Debt trading 100GLV dispute 300General enquiry/other 10,000PODs & proxies 2,500Trade debtors/creditors 150White-labels & affiliates 130Total 21,030


The table below outlines the notices provided by the Liquidators to the clients and creditorsof MFGA as well as the method adopted for their distribution.

Number Date Description Posted Emailed Uploaded1 01-Nov-11 Notice to all clients No Yes Yes2 03-Nov-11 Notice to futures clients only No Yes Yes3 03-Nov-11 Notice to CFD clients only No Yes Yes4 03-Nov-11 Circular to creditors Yes No Yes5 04-Nov-11 Update of futures (ASX) No Yes Yes6 04-Nov-11 Update on futures (international positions) No Yes Yes

7 07-Nov-11 Update on the first meeting of creditors andFAQs

No Yes Yes

8 07-Nov-11 Notice to all clients No Yes Yes9 09-Nov-11 Notice to all clients No Yes Yes10 09-Nov-11 Update to all grain and wool clients No Yes Yes11 09-Nov-11 Update on international futures positions No Yes Yes12 16-Nov-11 Notice to all clients No Yes Yes13 21-Nov-11 Notice to all clients No Yes Yes14 24-Nov-11 Notice to all clients No Yes Yes15 30-Nov-11 Notice to all clients No Yes Yes16 06-Dec-11 Notice to all clients No Yes Yes17 14-Dec-11 Notice to all clients No Yes Yes18 20-Jan-12 Notice to all clients No Yes Yes19 06-Feb-12 Notice to all clients No Yes Yes20 13-Feb-12 Notice to all clients No Yes Yes21 01-Mar-12 Notice to all clients No Yes Yes22 05-Mar-12 Notice to all clients No Yes Yes

23 06-Mar-12 Notice of special resolution to wind up thecompanies - Form 509D

No Yes Yes

24 12-Mar-12 Notice to all clients No Yes Yes25 20-Mar-12 Notice to all clients No Yes Yes26 27-Mar-12 Notice to all clients No Yes Yes27 03-Apr-12 Notice to all clients No Yes Yes28 24-Apr-12 Notice to all clients No Yes Yes29 08-Jun-12 Notice to all clients No Yes Yes30 03-Jul-12 Notice to all clients No No Yes31 03-Aug-12 Notice to all clients No No Yes32 28-Aug-12 Notice to all clients No No Yes33 30-Aug-12 Notice to all clients No Yes Yes34 20-Sep-12 Notice to all clients No Yes Yes35 21-Sep-12 Notice to all clients No Yes Yes36 12-Oct-12 Notice to all clients No Yes Yes37 23-Oct-12 Notice to all clients No Yes Yes38 08-Nov-12 Notice to all clients No No Yes39 27-Nov-12 Notice to all clients No No Yes40 14-Dec-12 Notice to all clients No Yes Yes41 21-Dec-12 Notice to all clients No No Yes42 09-Jan-13 Notice to all clients No No Yes43 08-Mar-13 Notice to all clients No No Yes


10Set out below is a summary of the Liquidators receipts and payments up to 2 March 2013:

The Liquidators are required to lodge a receipts and payments listing with ASIC every sixmonths of the Liquidation.

Receipts and Payments - AUD Account Receipts and Payments - USD Account

Receipts AUD ($) Receipt USD USDCarried forward from Administration 10,506,814 Carried forward from Administration 371,215.95Debt Trading Fees 157,500 Interest 26.49Dividend - Unlisted Investment 72,000 Transfer of Pre Appointment Funds 34,191.07Dividend - MFGSA 2,428,812 Total Receipts USD 405,433.51GEERs funding 647,018Interest 233,936Legal Cost Recoupment from CSAs 1,961,011 Payments USD USDMFGUK Recovery 714,649 Bank Fees (16)Plant & Equipment Sales 68,541 MFGUK Settlement Costs (115,925)Sundry Debtors 155,753 Services provided from MFGUK (54,395)

Total Receipts AUD 16,946,034 Total Payments USD (170,336)

Payments AUD ($) Cash at Bank USD 235,097.50Administrative Costs (110,852)Administrators Fees (241,204)ATO Clearing account (173,230)Bank Fees (11,811)COI & Creditor Meeting Expenses (7,301)Data/IT (43,907)Electricity (46,016)Employee Termination Payments (1,401,587)Insurance / Contractors (53,047)Legal Fees (3,344,591)Legal Fees - Client Reps Court Costs (2,229,437)Legal Fees - Non Client Reps CourtCosts (289,684)Liquidators Remuneration (3,990,652)Payroll Tax (37,855)Payroll/HR (39,235)Rent (118,328)Superannuation (363,676)Wages and Salaries (557,928)

Total Payments AUD (13,060,342)

Cash at Bank AUD 3,885,692


11The Committee of Creditors ( COC ) were elected by the creditors and clients at the firstcreditors meeting on 11 November 2011 for the Voluntary Administration period. There werefour meetings during the Administration period and the attendance of the members at thesemeetings is set out below:

Pursuant to Section 436E of the Act, the functions of the COC were to consult with theAdministrators about matters relating to the Administration and to receive and considerreports by the Administrator. The Committee also approved the Administrators fees.

The Committee of Inspection ( COI ) for the Liquidation period were elected by the creditorsand clients at the second creditors meeting on 2 March 2012. There have been eightmeetings to date and the attendance of these meetings is also set out below:

The functions of the COI were to consult with and receive reports from the Liquidators. Inaddition they acted d contracts whichthe Liquidators intend to enter into longer than 3 months and could approve if the Liquidatorsintended to settle and compromise debts owed to the Company over $50,000. TheCommittee also approved the Liquidators fees.

Both the COC and COI have been an integral part of the Liquidation and have been abeneficial sounding board for the Liquidators in particular with the Main Court proceedingsand recoveries. The Liquidators believe that both the COC and COI have been of greatassistance to the Liquidators whilst also representing their respective client/creditor.

12The Liquidators are required to complete and lodge a report pursuant to Section 533 of theAct with the Australian Securities and Investment C where it appears to

Members Category 1st Meeting02/12/11

2nd Meeting22/12/11

3rd Meeting01/02/12

4th Meeting24/02/12

Malin Cakic CFDJim Taig CFDMatthew Cottrell CFDJamie Clinnick CFDAdam Townley CFDPeter Candy FuturesJames Yhap FuturesGeoff Louw FuturesJames Coventry FuturesSam Liuzzo FuturesBrent Penfold FuturesDaniel Habib Trade CreditorLouis Snitzer Employees

Members Category 1st Meeting04/04/12

2nd Meeting14/05/12

3rd Meeting30/05/12

4th Meeting31/06/12

5th Meeting04/10/12

6th Meeting12/11/12

7th Meeting13/12/12

8th Meeting08/03/13

Jim Taig* CFDMatthew Cottrell CFD Resigned Resigned Resigned Resigned ResignedPeter Candy FuturesJames Yhap FuturesGeoff Louw FuturesSam Liuzzo FuturesKit Lowe FuturesDaniel Habib Trade Creditor Resigned Resigned Resigned*Resigned 14 May 2013


the Liquidators that a past or present officer of the Company may have been guilty of anoffence in relation to the Company and in other limited circumstances.

Following appointment the Liquidators performed an analysis of the solvency of theCompany and investigated:

If there was any evidence of insolvent trading by the Directors under Section 588(FC)of the Act.

Whether the Company entered into any voidable transactions under Section 588 ofthe Act.

Whether the Officers/Employees of the Company were guilty of an offence in respectof the Company under Section 533 of the Act.

On the basis of the Liquidators investigations, possible misconduct was reported to ASIC asrequired under the Act as set out below:

1. The Company moved client money between various clients' segregated accountswhere the Act or associated regulations may not have permitted the Company to doso.

2. Until 31 Jan 2007 the Company was the clearing participant on ASX Clear (Futures)Pty Limited (ASXCF) in respect of trading on the ASX 24 market. On 1 Feb 2007 theCompany's parent company MF Global UK Limited (MFUK) also became a clearingparticipant of ASXCF. From that time up until our appointment, in practice MFGA"gave up" all ASX 24 positions to MFUK to clear. This resulted in a dispute betweenthe Company and MFUK which has settled with return of funds to MFGA.

3. Prior to the appointment, the Company operated an international futures and CFDsbusiness whereby the Company would engage related bodies corporate and othernon-related entities in foreign jurisdictions to trade futures contracts and CFDs onbehalf of the Company's clients. Approximately AUD 8 million in the Company'somnibus account with affiliates may not be treated as "client money" by the affiliate.This may lead to the omnibus accounts, and ultimately the Company's clients,receiving a different treatment (and ultimately a lower return).

The Liquidators have been in regular contact with ASIC and have provided evidence andadditional information to ASIC should they wish to conduct further investigations into theDirectors of the Company if required.

13The Liquidators remuneraAppendix E.

The Liquidators are required to prepare a report detailing both the actual fees incurred andfuture estimated fees. These reports detail by task area, employee, and the number ofhours. These reports were sent to the respective COC and COI members.

During both the COC and COI meetings the Liquidators presented the estimates of fees anddiscussed the nature of the fees with the committee members.


The monthly remuneration has reduced significantly since November 2011. A summary ofthis is set out below:

In addition to the Main Court Proceedings and recoveries, other key actions during theAdministration and Liquidation have included asset realisation, dealing with creditors, clients,employees and investigations as outlined below:

13.1 Cost ManagementThe Voluntary Administration and Liquidation of MFGA is classified as a highly complexmatter that was further complicated by the number of stakeholders in particular clients ofMFGA and their competing interests.

Costs of such a matter can escalate and the Liquidators were always concerned of theimpact of the costs on the return to clients and creditors. A number of key actions that weretaken to minimise costs and time to return funds to clients included:

1. Commencing the Court Proceedings early. The Court Proceedings to determine keyissues that clients disputed were prepared and commenced in December 2011, onemonth after the commencement of the Voluntary Administration. This allowed thematter to progress to Court quickly.

2. We centralised the evidence process for the Court Proceedings via an electronicsystems that were securely accessible by all of the defendant legal firms.

3. Appointing Client Representatives. The appointment of a sufficient but manageablenumber of Client Representatives allowed for a cost effective legal process. Thematter was open for all clients to appear on their own. These measures meant theprocess was completed quickly and minimised the chance of the the Court decisionsbeing subject to an appeal.

4. To ensure the representative legal costs were reasonable, the Liquidators agreedrates with the legal representatives. We also engaged a legal cost consultant toreview and asses the legal fees before payment.

5. Settled disputes via negotiation rather than litigation. To date the Liquidators havemanaged to recover significant funds without lengthy litigation. This has resulted infewer costs, less time and greater return to creditors and clients.

6. Proving process in January/ February 2012 and September 2012. The Liquidatorsdesigned an electronic format for clients to prove their GLV claims, lodge a disputeand confirm their banking details.

0200400600800

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Administrators/ Liquidators Fees

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The September 2012 process was approved by the Court. We estimate that each ofthese processes, done electronically rather than the normal paper based process hassaved a minimum of $750,000 each time; a total minimum saving of $1.5 million.

7. On a number of occasions we have sought and have been granted approval by theCourt to communicate with clients and creditors on formal matters electronically. Thishas been a significant cost saving.

8. We retained key employees of MFGA to perform duties at a cost significantly less thanthe cost of staff.

9. We used email and our website to keep stakeholders informed. This reduced the costof maintaining a call centre and client response services.

13.2 Assets13.2.1 Sale of Business as a Going Concern

Preparing confidentiality agreement, information memorandum and a data room forpotential purchasers

Liaising with the 15 interested parties that signed and returned confidentialityagreements

Liaising with MF Global Hong Kong and Singapore regarding a Asia-Pacific sale Preparing and providing a term sheet specifying expressions of interest cut off dates

and terms to interested parties Internal meetings to discuss sale strategy and review offers received Valuation of business and business entities by Deloitte Corporate Finance

13.2.2 Plant and Equipment

Securing, reviewing and managing assets and coordinating the removal and auctionof plant and equipment

Reviewing, disclaiming and renegotiating leases

13.2.3 Debtors and other assets

Ongoing correspondence with debtors to recover debts outstanding Formal valuation and revaluation of shareholding in unlisted investment Liaising with the unlisted investment and legal teams to negotiate the sale of the

shareholding in the unlisted investment Preparing sale of shareholding documentation and correspondence including an

Information Memorandum Liaising with potential purchasers and negotiating terms of sale

13.3 Creditors13.3.1 COC, COI Creditors Meetings

Preparing and holding the First and Second Creditors Meetings, processing proofsand proxies, advertising meetings, preparing accompanying reports, circulars,presentations minutes and web broadcasting

Preparing, reviewing and distributing Section 439A Report and Annual GeneralMeeting report via email, website and post

Responding to creditor enquiries


Preparing and holding 5 Committee of Creditors meetings and 8 Committee ofInspection meetings, including preparing accompanying circular, presentation,confidentiality agreements and drafting and lodging minutes of each meeting

Attendance at Meeting of Creditors for MF Global Inc. in New York Planning Annual General meeting and preparing related documents, reports and

communications

13.3.2 Retention of Title Claims

Managing retention of title claims including receiving notifications of intention toclaim and processing provision of retention of title claim forms

13.4 CFD, Futures, Margin FX and Online FX Clients13.4.1 Client enquiries and communication

Preparation and upload of notices to clients to Deloitte-MF Global webpage Responding to email and telephone enquiries Responding to banking detail updates and information requests Internal discussion and meeting with legal advisors regarding client email enquiries

and frequently asked questions

13.4.2 Reconciliation and close out of client positions

Reconciling client positions to general ledger, R&N reporting tool and close outinformation received from affiliates and counterparties

Negotiating with counterparties and affiliates regarding the close out of positions andreviewing, analysing, testing and verifying of close out prices. Organising thetransfer of positions, where possible, and instructing MFGA staff of close outprocedures

Communicating with clients regarding reconciliation issues Preparation of close out methodology paper for discussion with Committee of

Creditors Preparation of reconciliation report to provide with affidavit to receive court directions

13.4.3 Client Segregated Accounts

Reviewing and reconciling segregated accounts to general ledger, seeking legaladvice when necessary

Preparing, reviewing, negotiating and managing term deposits Planning, negotiating and executing the conversion of foreign currency CSAs into

Australian dollars

13.4.4 Distribution of client funds

Internal discussion with MFGA treasury regarding the distribution procedures forclient funds

Obtaining preliminary legal advice regarding distribution and proving process forreturning client funds

Construction and review of client claims database, corresponding with E trade whennecessary

Development, monitoring and execution of two online proving processes includingreviewing results, managing disputed claims, managing IT issues, develop ing clientclaims database, preparing explanatory statement to clients, liaising with DeloitteDigital and Deloitte Forensic teams and responding to client enquiries


Preparation of distribution analysis report to provide with affidavit to receive courtdirections

Preparation of client database reconciliation memo Implementation of four rounds of client distributions, including communicating to

clients, creating, reconciling and issuing distribution statements with assistance fromDeloitte Data Analytics and assessing withholding tax implications

Updating banking details of international and domestic clients including attempting tocontact clients for which we have insufficient banking details and rectifying paymentsthat have bounced back

13.4.5 Counterparty matters

Ongoing and extensive negotiations with affiliates, counterparties and legal advisorsregarding funds outstanding and offsets

Meeting with counsel and legal advisors regarding claim and position of MF GlobalUK regarding funds held with ASX

Negotiation of settlements, including liaising with legal advisors Tracking, reconciling and converting recovered monies

13.5 Employees13.5.1 Employee Entitlements

Calculating, reviewing and paying employee entitlements, reviewing and managingdisputes regarding employee entitlement, reviewing awards, reconciling outstandingsuperannuation adjudicating employees claims, correspondence with legal advisorsregarding awards and disputed employee claims

Calculating GEERs distribution relating to employee entitlements, liaising withDEEWR, communicating the GEERs process with employees and processingGEERs distributions to employees

Calculation, review and payment of payroll tax, wages, PAYG and superannuation

13.5.2 Employee communications

Preparing and distributing circulars to employees and their representativescommunicating entitlements, options, duties and responsibilities and terminationprocess, post-employment contracting and distribution expectations and timing

13.6 Trade on Liaising with IT, telephone and data suppliers regarding ongoing services, and

termination of services Winding down offices including relocating to a smaller office, managing records,

liaising with staff, liaising with Grosvenor Place management, reviewing leases andeventually winding down the office all together

Maintaining purchase order registry, authorising purchase orders and processingpayment of suppliers

Processing receipts and payments Preparing financial reports for Committee meetings, creditors meetings and statutory

reports including review of balance sheet, budgeting, cash flow forecasting andpreparing estimated state of position


13.7 Investigations13.7.1 Conducting Investigation

Collecting, reviewing and storing company books and records, imaging keypersonnel computers and company servers

Review of company nature and history Review of specific transactions and liaising with directors regarding certain

transactions Liaising with MF Global Inc. and MF Global Holdings and their representatives with

regards to obtaining and then continued testing of the general ledger from the US Continued meetings, discussions and investigations regarding the co-mingling of

client monies Meetings and discussions with MFGA staff regarding transfer of funds between pools

and bank accounts Meetings and discussions with legal advisors regarding collation of evidence for

presentation to Court Drafting, reviewing and finalising CSA investigation report

13.7.2 ASIC Reporting

Liaising with ASIC regarding Section 30 requests for information and meetings andupdates with ASIC regrading position and conduct of the Administration/Liquidation

13.8 Administration13.8.1 Court Proceedings

Applications to Court regarding email notices and the extension of the conveningperiod including the preparation of related affidavits

Collating and reviewing evidence, preparing, reviewing and finalising Affidavits ofChris Campbell, reviewing submissions with legal team and counsel and publishingcourt documents on the Deloitte-MF global website

Continued meetings and discussions on Court applications/directions regardingdistribution proving process, MFG UK recognition in Australia, MFG UK /ASXdispute, calculation of client entitlements and pooling directions

Review of affidavits of Bob Yap, Liquidator of MF Global Singapore and Deutsche Attendance at Court hearings and subsequent review of judgements with legal

advisers and Counsel including liaising with legal advisors regarding theinterpretation of orders and practical issues related to the calculation and distributionof client funds

Preparing cost allocation report and preparing cost allocation as per the relevantCourt orders

13.8.2 Client Representatives

Organising the allocation of client representatives Research, writing, preparation and distribution of the following reports to the Client

Representatives:- Close Out Valuation Information Report- Client account offset report- Client responses to Close Out GLV report- Close out adjustments report- Cost allocation report- Receipts and payments report


Responding to requests for information from the Client Representatives following thesubmission of the reports, including clarifying details and providing further evidenceand documentation

Maintenance of evidence document management system Paying Client Representative Fees, Counsel fees, including liaising with the cost

assessor and implementing suggested invoice amendments

13.8.3 Debt Trading

Discussing and planning of trading of client debt with legal team and DeloitteForensics including assessment and briefing of Anti Money Laundering and othercompliance issues by Deloitte Forensics

Planning systems and workflows for the processing of client debt trades Forecasting the prospective cost of Debt Trading and prospective staff commitment Communicating by email with prospective parties and clients interested in trading

debt Correspondence with legal team regarding debt trading issues Executing transfer of claims including all required checks and procedures

13.8.4 Insurance

Identification, preparation and review of insurance requirements, includingcorrespondence with brokers and specialists

13.8.5 Directors

Preparation and review of directors pack and Report as to Affairs Correspondence with directors regarding duties and obligations and maintenance of

AFSL licence

13.8.6 Statutory Reporting

Monthly BAS and Quarterly PAYG reporting Review of income tax return by Deloitte Tax 524 lodgements to ASIC Lodgement of Forms 505 regarding cessation of Administrators and appointment of

Liquidators Lodgements of Form 509 with ASIC Discussion with tax agents regarding taxation issues regarding GST calculation

percentage Complying with ATO audits

13.8.7 Bank account administration

Closing and managing pre-appointment accounts, establishing Administratoraccounts

Liaising with ANZ regarding ANZ Transactive Services Preparations of Bank reconciliations, transaction journals, daily banking updates and

monitoring interest Correspondence with clients regarding pre-appointment transfers, arranging

payment of post-appointment error payments as per Court orders

13.8.8 General

Calculating, monitoring and forecasting fees and billings

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Regulation 5.6.29FORM 532

Corporations Act 2001

MF GLOBAL AUSTRALIA LIMITED(IN LIQUIDATION)

ACN 001 662 007

APPOINTMENT OF PROXY

I/WE*(1),(NAME) .....................................................................................................................................of (ADDRESS) ...............................................................................................................................................................................................................................................a member / creditor of MF Global Australia Limited, hereby appoint (2) in

to vote at the joint meeting of members and creditors to be held on Friday 31 May 2013 at 10:00am, or atany adjournment of that meeting.

DATED this day of 2013

___________________________________(3)(4)Signature

Important Notes Covering Completion of Proxy

(1) If a firm, strike out "I" and set out the full name of the firm.(2) Insert the name, address and description of the person appointed.(3) The proxy of a creditor who is a corporation must be executed under the Common Seal of the

Company, or by a duly authorised officer stating the nature of that authority.(4) A proxy initially sent by facsimile must also have the original delivered to the Liquidator's office.*Strike out where applicable

CERTIFICATE OF WITNESSNote: This certificate is to be completed only where the person giving the proxy is blind or incapable of

writing. The signature of the creditor is not to be attested by the person nominated as proxy.I, ...................................................................... of ................................................ ................ certify that theabove instrument appointing a proxy was completed by me in the presence of and at the request of theperson appointing the proxy and read to him before he attached his signature or mark to the instrument.

DATED the ............................... day of .............................................................., 2013

Signature of Witness: __________________________________________Description:Place of Residence: ........................................................................



FORM 535CORPORATIONS ACT 200

Subregulation 5.6.49(2)

FORMAL PROOF OF DEBT OR CLAIM (GENERAL FORM)

ACN 001 662 077

To the Liquidator of MF Global Australia Limited (In Liquidation)

1. This is to state that the company was, on 1 November 2011 (1) and still is, justly and trulyindebted to(2)

.......................................................................................................................................................... ..................................................................................................................................................... for ..............................................................dollars and .................................................................. cents.

Particulars of the debt are:Date Consideration(3) Amount GST Remarks(4)

$ included $

2. To my knowledge or belief the creditor has not, nor has any person by the creditor's order, had orreceived any manner of satisfaction or security for the sum or any part of it except for thefollowing:(5)

3.(6)* I am employed by the creditor and authorised in writing by the creditor to make this statement. Iknow that the debt was incurred for the consideration stated and that the debt, to the best of myknowledge and belief, still remains unpaid and unsatisfied.

3.(6)* I am the creditor's agent authorised in writing to make this statement in writing. I know that thedebt was incurred and for the consideration stated and that the debt, to the best of my knowledgeand belief, still remains unpaid and unsatisfied.

DATED this day of 2013

Signature of Signatory .....................................................................................................................................

NAME IN BLOCK LETTERS ........................................................................................................................

Occupation .....................................................................................................................................................

AddressSee Directions overleaf for the completion of this form

OFFICE USE ONLY

POD No: ADMIT - Ordinary $

Date Received: / / ADMIT - Preferential $

Entered into IPS/Computer: Reject $

Amount per RATA $ H/Over for Consideration $

PREP BY/AUTHORISED TOTAL PROOF $

DATE AUTHORISED / /



MF Global Australia Limited (In Liquidation) - 29 August 2012 Judgment summary

# Issue Judgment Paragraph

1 + 2Is pooling or grouping permitted?If some pooling is permitted, what pooling or groupingshould occur?

I will therefore direct the Liquidators that they arejustified in proceeding on the basis of four pool in thefour product lines.I will direct the Liquidators in the MFGS Proceedingsthat they may properly proceed on the basis that theSingapore-based accounts and Australian-based CFDCSAs may be pooled.

6788

3 Is foreign currency "money"?

I will make a direction, and a correspondingdeclaration, that the Liquidators are justified inproceeding on the basis that foreign currency is"money"

91

4 Convert foreign currency to Australian dollars?

I am satisfied that a direction should be made thatconfirms the entitlement of the Liquidators to convertthe funds, including the funds held in the Singapore-accounts into Australian dollars.

97

5 Date and method of determining clients' entitlement?

I will direct the Liquidators that they would be justifiedin determining entitlements on a contractual basis as atthe appointment date, by reference to GLV calculatedunder the client agreements on the basis of 31October 2011 mark-to-market prices. The precise formof that direction will need to be addressed insubmissions as to orders.

134

6 Is set-off as between positive and negative accountbalances owed by the same MFGA client allowed?

I am satisfied that MFGA is entitled to exercise a rightof set off and I am satisfied that, on balance, it isappropriate for the Liquidators to do so although thiswill give the affected clients the benefit of 100 cents inthe dollar in their positive balances, in the interest ofthe efficient distribution of the relevant client monies. Iwill make a direction to that effect.

159

7 Should clients with an entitlement of $1 or less betreated as having no entitlement?

It is therefore expedient to permit the Liquidators toignore these [$1] claims. I would make a direction tothat effect

161

8Should client deposits paid into Client SegregatedAccounts (CSAs) on (or after) 1 November 2011 bepaid back to those clients?

I will accordingly make a direction, and correspondingdeclaration, that the Liquidators should return all clientdeposits which were paid into the CSAs after theappointment date on the basis that they were paid intosuch accounts in error

166

9 GST on commissions deducted from the CSAs? N/A

10 Should interest earned on CSAs be paid to MFGA orclients?

I will make declarations that Online FX clients andFutures clients have no right to interest on the CSAs;CFD clients and Margin FX clients are entitled tointerest on the CSAs at the rates provided by MFGA inaccordance with the client agreements; and MFGA isonly entitled to recover interest on the CSAs to theextent that monies remain in those accounts aftermaking prior ranking payments under reg 7.8.03(6).

254

11 + 12

To which account should funds recovered be paid into?Futures recoveries treated as funds for clients?

OTC recoveries as funds for MFGA or Clients?

I consider that all Futures clients have equal claims toall Futures Recoveries where the payment of margin toFutures Agents from which they were derived werefunded from the mixed Futures CSAs to which allFutures clients had contributed.In my view, funds returned by OTC counterparties toMFGA in respect of hedging were therefore receivedby MFGA in its capacity as a person "acting on behalfof the [OTC] client[s]" for the purposes of981A(1)(b)(iii) and were therefore monies which wererequired to be paid into the relevant CSAs maintainedunder s981B.

198241

13 Should new CSAs be pooled with existing CSAs?

The findings which I have reached above suggest that,consistent with the treatment of existing CSAs, thenew CSAs opened by the Liquidators should be pooledwith the existing CSAs across the four product lines,with the Singapore-based accounts to be pooled withthe Australian-based CSAs

250

14 Liquidators' Remuneration and Expenses

I will hear the parties as to the form of orders and theissues which have been reserved for furthersubmissions above, including the Liquidators'remuneration, expenses and costs.

255

15 Liquidators' costs of these proceedings

I will hear the parties as to the form of orders and theissues which have been reserved for furthersubmissions above, including the Liquidators'remuneration, expenses and costs.

255



Title Description Hourly Rate(ex GST)

Partner Registered liquidator or bankruptcy trustee. Brings his or herspecialist skills to the administration or insolvency task.

$ 650.00

Senior Managerexperience on insolvency matters with a number of years atmanager level. Answerable to the appointee but otherwiseresponsible for all aspects of an administration. Capable ofcontrolling all aspects of an administration. May beappropriately qualified to take appointments in his/her ownright.

$ 525.00

Manager Typically CA or CPA qualified with 6 to 8 years experienceworking on insolvency matters. Will have experienceconducting administrations and directing a number of staff.

$ 370.00

Senior Analyst Typically studying towards CA or CPA qualification with 4 to 6years insolvency experience. Assists in planning and controlof smaller matters as well as performing some more difficulttasks on larger matters.

$ 280.00

Analyst Typically studying towards CA or CPA qualification with 2 to 4years insolvency experience. Works under supervision of moresenior staff in performing day-to-day fieldwork.

$ 240.00

Graduate Typically studying a recently graduated student. Works undersupervision of more senior staff in performing day-to-dayfieldwork.

$ 185.00

Support Advanced secretarial skills $ 185.00

Vacationer Typically a student in their penultimate year of university.Works under supervision of more senior staff in performingday-to-day fieldwork.

$ 185.00

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